The Bharatiya Janata Party (BJP) today said octroi would not come back till the Akali government initiates other reforms such as rolling back free power to the farm sector. Bringing octroi back would mean other freebies have to go, Local Bodies and Industries Minister Manoranjan Kalia told The Indian Express today.

In what is yet another instance of widening urban-rural divide in the ruling alliance -- after SAD had to dole out Rs 292-crore power subsidy to urban consumers on demands of the BJP-- Kalia said though the precarious financial situation of the state demands some drastic decisions, they should be brought in with uniformity.

Octroi, an issue which remains sensitive with the traders, who are the traditional vote bank of the BJP, was abolished in September 2006 by the then Congress government. Kalia claimed that the revenue loss of Rs 550 crore caused by the abolition of octroi has been offset through segregation of VAT revenue to local bodies, besides allocation of funds from other heads.

On the proposed property tax, which could generate resources to offset the loss of revenue from octroi, Kalia said if imposed, it would just replace house tax.